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Preston Byrd

Business Training
A project financed with tax exempt bonds typically qualifies for the 4% new construction/ rehab tax credit. This is because tax exempt bonds are a kind of federally subsidized financing, and the 9% credit may not be used in such cases. If the project is located in a Qualified Census Tract or a Difficult to Develop Area, it is able to use the 130% basis Boost. (Like any other project, it also qualifies for the 4% acquisition credit if it meets the standard acquisition tax credit criteria.)

One important advantage to using tax credit bond financing is the fact that the project does not need to compete for its tax credits. They are allocated to the project “as-of-right” once bond financing is awarded to the project.

However, the full amount of the project’s tax credits will be awarded only if certain very specific criteria are met:

• At least 50%…

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